Indian economy likely to expand 7.6 pct in 2018 as whole - Scotiabank

The Indian economy is performing solidly. Real GDP growth averaged 7.9 percent on a year-on-year basis in the January to June period, after rising 6.3 percent in 2017. According to a Scotiabank research report, the economy is likely to grow 7.6 percent this year as a whole. Private consumption, investment activity, and momentum in the manufacturing and services sector continue to be strong.

Moreover, the country’s fiscal policy stance continues to be growth-supportive. The fact that the Indian economy is less export-oriented than its regional peers is providing some protection against any adverse effect on real GDP growth stemming from the U.S.-China trade conflict and the U.S.’s trade policy more broadly.

India’s medium-to-longer-term growth outlook is seen to be reasonably encouraging as well. Recent reforms, such as tax reform, bankruptcy code, bank recapitalization and non-performing asset resolution, liberalization of foreign direct investment, and several attempts to formalize the economy, will assist in reviewing credit growth and encourage private sector investment, thereby underpinning the economy’s momentum.

“Accordingly, India is set to remain a growth outperformer among the world’s major economies in the foreseeable future. We forecast India’s real GDP to advance by 7½ percent y/y on average through the rest of the decade”, added Scotiabank.